Can Alloy require franchisees to obtain nondisclosure and confidentiality agreements from certain individuals?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
pened under the Development Schedule.
YOUR DUTIES
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- You must perform the following obligations:
- A. You must comply with all of the terms and conditions of each Franchise Agreement, including the operating requirements specified in each Franchise Agreement.
- B. You and your Owners, officers, directors, shareholders, partners, members and managers (if any) acknowledge that your entire knowledge of the operation of an ALLOY Facility and the System, including the knowledge or know-how regarding the specifications, standards and operating procedures of the services and activities, is derived from information we disclose to you and that certain information is proprietary, confidential and constitutes our trade secrets. The term "trade secrets" refers to the whole or any portion of know-how, knowledge, methods, specifications, processes, procedures and/or improvements regarding the business that is valuable and secret in the sense that it is not generally known to our competitors and any proprietary information contained in the Manuals or otherwise communicated to you in writing, verbally or through the Internet or other online or computer communications, and any other knowledge or knowhow concerning the methods of operation of the Facilities. You and your Owners, officers, directors, shareholders, partners, members and managers (if any), jointly and severally, agree that at all times during and after the term of this Agreement, you will maintain the absolute confidentiality of all such proprietary information and will not disclose, copy, reproduce, sell or use any such information in any other business or in any manner not specifically authorized or approved in advance in writing by us. We may require that you obtain nondisclosure and confidentiality agreements in a form satisfactory to us from the individuals identified in the first sentence of this paragraph and other key employees.
- C. You must comply with all requirements of federal, state and local laws, rules and regulations.
DEFAULT AND TERMINATION
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- The following provisions apply with respect to default and termination:
- A.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy can require franchisees to obtain nondisclosure and confidentiality agreements. Alloy discloses to franchisees knowledge of the operation of an Alloy facility and the Alloy system, including specifications, standards, and operating procedures of the services and activities. This information is proprietary, confidential, and constitutes Alloy's trade secrets. Alloy may require franchisees to obtain nondisclosure and confidentiality agreements from owners, officers, directors, shareholders, partners, members, managers, key employees, and other individuals in a form satisfactory to Alloy.
This means that as an Alloy franchisee, you and certain individuals associated with your franchise must maintain the absolute confidentiality of Alloy's proprietary information both during and after the term of the franchise agreement. This includes not disclosing, copying, reproducing, selling, or using any of this information in any other business or manner not specifically authorized by Alloy. Alloy's right to require these agreements helps protect its trade secrets and confidential information, which is crucial for maintaining a competitive advantage and the integrity of the Alloy system.
Additionally, Alloy may require franchisees to obtain a signed non-compete agreement from their manager and other individuals, including owners, guarantors, officers, directors, members, managers, partners, and holders of any ownership interest, as well as their immediate family members. This agreement would contain non-compete provisions satisfactory to Alloy. This ensures that those with access to Alloy's confidential information and training do not use it to compete with Alloy, either during the term of the agreement or for a specified period afterward.